U.S. Customs and Border Protection, or CBP, requires buyers of goods from other countries to provide appropriate documentation upon entry of the purchased goods into the U.S. The documentation typically includes a commercial invoice with additional customs data to declare the goods and provide information such as the identity and location of the buyer and seller, the type of goods, the quantity of goods, and the country of origin. The customs information in the commercial invoice further includes a customs classification and a customs value for the purchased goods. The customs information allows the customs agent to determine whether duties for the imported goods must be collected and whether fair trade provisions apply to the imported goods. The commercial invoice is typically generated by the supplier of the goods in connection with the sale of goods to the importing manufacturer.
Another document that CBP requires is an electronic manifest (e-manifest) received through the CBP's Automated Commercial Environment (ACE). ACE is the CBP web-accessible computerized system designed to provide agents with information about goods transported across borders. The e-manifest not only provides information about the commercial transaction between the buyer and the seller; it also provides information about the carrier and driver, crew, or passengers and the vehicle used to transport the goods across the border. It provides a CBP agent with information to pre-screen the driver, crew, passengers, conveyance, equipment, and shipment information before the vehicle actually arrives at the border. The e-manifest is typically prepared and electronically submitted to ACE by the carrier of the imported goods.
Buyers of imported goods typically rely on their suppliers to produce commercial invoices because they are the parties that manufacture the goods and work with the carriers to transport the goods. Buyers may further rely on their carriers to produce e-manifests because they are the parties that transport the goods across the border. Inaccuracies in these documents, however, can be costly to the buyer. For example, the e-manifest must comply with CBP requirements. If the e-manifest has inaccurate information, the shipment of goods to the buyer may be delayed. If the goods are used by the buyer in manufacturing, the buyer's production may be delayed until the goods are released resulting in a monetary loss to the buyer.
Accuracy of the commercial invoices is also important. If the commercial invoice fails to identify the appropriate customs classification and customs value of the goods, the buyer may overpay or underpay the applicable duty. Therefore, it is important to the buyer that the commercial invoices have accurate information. The buyer may in fact, have corporate policies that its suppliers should follow in preparing commercial invoices to reduce the occurrence of errors.
In addition to generating accurate custom documents, it is important for custom documents to be generated in timely manner. CBP requires the e-manifest at least one hour in advance of the vehicle's arrival at the border so that an agent can complete pre-screening. Delays in arrival of the required documents can be as costly for the manufacturer as inaccurate information. If transportation of the goods is delayed for any reason, the buyer's production may be delayed until the goods are released resulting in a monetary loss to the buyer.
There are third party services that assist buyers and their suppliers with the process of generating electronic customs documents and transmitting the documents to the CBP in advance of a vehicle's arrival at the border. The services, however, typically use proprietary technology for generating the custom documents and typically do not import electronic information into their systems. Instead, they accept faxes or other forms of documentation from a supplier or other source and then key the necessary data into their proprietary computer program for generating the custom documents. The manual entry of data, however, is time-consuming and error-prone and may be a source of the inaccuracies in the generated customs documents. Furthermore, the manual data entry process requires a substantial amount of lead time to allow the service enough time to receive and enter the data as well as ensure that the documents arrive at the CBP at least three hours in advance of the vehicle.
Customs documentation processes that require a substantial lead time are inefficient and costly, especially for a manufacturer that practices just-in-time (JIT) inventory management. Suppliers that provide imported goods for the (JIT) manufacturer must account for the lead time required to produce the customs documents that are needed in advance of the border crossing. The lead time determines when information must be available to generate the customs documents, and therefore, impacts the supplier's start of production and the amount of time the parts are maintained in inventory (e.g., at the supplier's facility or in transit). A reduction in the lead time that is required to generate the customs documents can reduce the amount of time the parts are maintained in inventory, and therefore, the JIT manufacturer's costs.
There is a need for a methodology to facilitate border crossings by generating documents that conform to import requirements as well as a buyer's corporate requirements. There is a need for a methodology that generates accurate and timely customs documents thereby facilitating border crossings by reducing delays at border crossings. There is a need for a methodology that reduces the lead time to generate customs documents thereby reducing the lead time needed by suppliers to produce goods.